1. Purpose & Scope

This document sets out Northampton Borough Council policy and guidance on the security of its benefit system, identifying roles and responsibilities in the prevention of fraud & error and when this fails the prosecution of persons who have committed offences.

It is intended to bring together the policies on counter fraud activity and the Prosecution Policy

Housing Benefits current pay out approximately £50m per annum, it is estimated that nationally 3% of this can be attributed to fraud & error that leaves a potential of £1.5m taken from the system incorrectly.

Headline figures for 2007/08: - 1366 referrals into the section. 794 referrals taken on. 429 case resulted in a reduction in benefits 46 Individuals faced a Caution, 10 Administrative Penalty & 18 Prosecution. £572,000 has been identified as overpaid. 2. Policy Statement

Northampton Borough Council (The Council) is committed to the delivery of Housing Benefit and Council Tax Benefit to its customers. We will ensure our customers are made aware of the benefits available to them, through our promotion of the services provided.

We believe effective procedures and timely administration play a key role in promoting use of the service and in preventing fraud and error entering the system. Where benefit is paid in error, the Council is dedicated to the recovery of any overpaid amounts and will use all available legal processes to achieve this. We will not hesitate to prosecute an individual or group of individuals, who deliberately and knowingly set out to de-fraud the Benefit system or fail to declare relevant changes in circumstances.

3. Definitions

Fraud - “The deliberate misrepresentation or omission of facts in order to obtain for oneself or others a financial advantage, which would otherwise not be granted.” DWP – Department for Work & Pensions PACE – Police & Criminal Evidence Act 1984 FIMS – Fraud Investigation Management System

4. Policy Guidance and Procedure

Aims

- Ensure that systems and procedures operate in a manner, which will minimise abuse both internally and externally.
- Ensure benefit fraud team members work in accordance to Codes of Conduct.
- Provide adequate resources to monitor and assess the right benefit at the right time and identify irregularities.
- Manage investigations of irregularities to a reasonable conclusion.
- Conduct pro-active investigations in order to detect benefit frauds not uncovered by routine verification.
- Take legal proceedings where there is a reasonable expectation of conviction, in line with the prosecution guidelines set out in this policy. Where possible we will notify Northampton Borough Council Press & Publicity department of the outcome for wider local exposure.
- Full recovery of fraudulent overpayments of benefit to deter further abuse.
- Produce an Annual Counter-Fraud Business Plan.
- Review this policy on an annual basis whilst considering the Annual Counter-Fraud Business Plan. Corporate Framework

In order for the Benefit Counter Fraud Strategy to be effective, support and co-operation is required from across the Council. The Council’s Corporate Anti-Fraud Policy requires employees to report to the appropriate manager, any impropriety. Sound procedures need to be maintained within all service areas, which have a role in respect of administration of benefits. Additionally sound recruitment procedures are required to ensure that internal abuse is minimized and any prospective fraudster does not manage to gain employment in these sensitive areas. The Council also has an employee declaration specific to areas within fraud, benefits and revenues which requires employees to provide details of:

- Persons known to them, in receipt of benefit
- Properties owned by them and let out

Managing Benefit Administration

Clear responsibilities and standards are required within the administration of Benefits. In addition the importance of timely and good communication between internal sections such as One Stop Shop, Customer Service, Revenues & Benefits, Housing, Information Technology and Legal areas of the Council is vital. Good communication is required internally between officers and also externally between the officers, claimants and landlords.

We will employ quality controls checks and carry out performance monitoring to ensure standards are upheld and provide adequate training, flexibility and development to ensure we have an excellent administration. These factors will allow accurate gathering of data, assessment and verification of benefit applications. It is important that we identify irregularities arising from claim analysis and refer suspicions to the Fraud Team.

It is an integral part of that administration that everyone is aware of the risks of fraud and knows what to do when they suspect it. Consequently, the Council will further seek to promote counter-fraud awareness throughout the Benefit Service and other affected service areas within the Council.

Fraud Team

The Council will take steps to ensure that its fraud officers are fully up to date with current counter fraud issues. It is essential that staff remain up to date with policy & procedures and new staff are trained to a professional standard.

The Council is subscribed to NAFN – National Anti-Fraud Network and uses this services to gather intelligence and evidence to assist with the investigation work and criminal prosecutions.

The Council is committed to partnership working across its service provision. The Fraud team works within the national Fraud Partnership Agreement with the Department for Work & Pensions’ (DWP) Fraud Investigation Service (FIS). We set and maintain locally agreed service standards with FIS in the form of Ad Hoc meetings between managers & as active members of locally held quarterly fraud liaison meetings with the other Northamptonshire Council’s at which FIS staff are invited and encouraged to attend.

The Council will continue to maintain a network of partnerships to ensure the proper exchange of intelligence and good practice on counter fraud matters, whilst observing necessary confidentiality requirements.

**Preventing Fraud & Error**

The Council has a commitment to comply with principals of the Verification Framework in its attempts to prevent fraud and error from entering the system. We must have adequate procedures in place to verify and validate documents and forms, combined with accurate assessment of claims to support this.

With good liaison between all staff and a commitment to regular fraud awareness sessions this checking process will also assist in the detection of fraud and referrals to the fraud team for Investigation.

The Council has an Intervention Team that assists with this process by visiting customers. They use some of the latest technology to enable them to review the customers claim, check the declarations made previously and update the systems with changes while still in the customers home.

**Managing Investigations**

It is the Council’s duty to protect the Public Purse so there will always be a need to investigate irregularities. The preventative measures may deter some opportunist but those who are set on providing false information and/or failing to declare relevant changes in circumstances may succeed. Designated Fraud Investigation Officers, who will be professionally trained and resourced, will carry out investigations. They must work to a specific Code of Conduct given the sensitive nature of their duties. Additional features must be maintained such as Safety and Visiting Procedures and joint working with the Department for Work and Pensions fraud staff.

When investigating benefit fraud, the Council’s fraud investigators and authorised officers will work within the guidelines of the Police and Criminal Evidence (PACE) Act 1984, The Human Rights (HRA) 1998, Regulation of Investigatory Powers (RIPA) Act 2000, The Data Protection (DPA) 1998, and The Criminal Procedures and Investigations (CPIA) Act 1996 and apply the Council’s policies on equalities and customer care. The Council’s officers will, at all times, apply appropriate procedures to maintain confidentiality.

**Prosecution and Fraud Investigation**

An investigation carried out by Officers charged with the duty of investigating possible fraud has one important function, to establish the facts.

It is essential that the Officers remember the importance of this function in the investigation and be aware of any tendency to look for evidence at the expense of retaining a balanced view.

Criminal prosecutions take place in a minority of cases, if investigators ensure they establish the facts, it is easier to bring a successful prosecution in appropriate cases, and time will not need to be spent gathering further evidence after the event.

The Council will ensure that its fraud investigation officers understand that, under section 67(9) of the Police and Criminal Evidence (PACE) Act 1984 they are persons charged with the investigation of crime and are, therefore, subject to the same restraints as the police, especially those contained in PACE.

**Legal Proceedings**

The Council is committed to a prosecution and sanction based, quality driven investigation strategy and supporting a consistent approach to the investigation of joint cases with the DWP fraud officers. The aim wherever possible, is to bring the whole criminality against the benefit system before the Courts.

Northampton Borough Council will not hesitate to prosecute an individual or group of individuals, whom deliberately and knowingly set out to de-fraud the benefit system. Equally, it will not hesitate to prosecute those who fail to declare relevant changes in circumstances.

When alleged frauds are detected, the decision whether to refer matters for prosecution rests with the appropriate Council’s Officer’s, who will use the following criteria: -

1. Is there a realistic prospect of a conviction? (The evidential test)
2. Is a prosecution in the public interest? (The public interest test)

The Council will only start or continue with a prosecution when the case has passed both tests.

It is very important to remember that a decision to prosecute an individual is a serious step. Fair and effective prosecution is essential to the maintenance of Law and Order even in a small case; a prosecution has serious implications for all involved – victims, witnesses and defendants. Northampton Borough Council applies its Prosecution Policy (appendix A), so that it can make fair and consistent decisions about prosecutions. Each case is unique and will be considered on its own facts and merits.

Appendix A (Northampton Borough Council Prosecution Policy) sets the criteria and considerations that should be applied in making these decisions. Appendix B is a flow diagram highlight how each stage fits into the next.

**Publicity**

The Council will seek to obtain appropriate publicity on individual prosecutions to send a clear message to the general public that we are committed to protecting the public purse and to potential Fraudsters a deterrent message that the council will not tolerate fraud and offenders can face criminal charges.

In all publications we will endeavour to advertise the Benefit fraud hotlines and e-mail account supported by the Council to encourage people to continue to support us in our efforts to reduce fraud in the system. Hotlines

- **01604 837320** Internal benefit fraud hotline (24hour service with both Officer and answer phone contact)
- **0800 3286340** External freephone national hotline run by the DWP.
- **reportfraud@northampton.gov.uk** - e-mail address

Recovery of Overpayment

The Council will seek to recover the full fraudulent overpayment as a deterrent to future attempts to defraud the benefit system. Where prosecution has taken place a claim for compensation may be made towards the overpayment and the remainder will be sought through civil action as appropriate.

Recording and production of management information

The administration of benefits and the detection of benefit fraud have a significant effect on the subsidy claimed by Northampton Borough Council. Consequently sufficient management information is required in order to ensure that maximum subsidy is claimed accurately.

Additionally analysis of data will enable resources to be directed to the area of most effect. This applies in terms of administration and fraud detection.

Summary

- The Council is committed to the ensuring that the *right* benefit gets to the *right* people at the right time.
- The Council will act against those people who obtain benefits to which they are not entitled as a result of fraudulent activity.
- The Council will seek to ensure that any benefit obtained to which a claimant is not entitled is repaid in full. However, the Council will take care not to place anyone into a situation of financial hardship.
- The Council will respect the lives of all persons involved in an investigation of alleged benefit fraud and pay full regard to the legislation in dealing with these people.

5. Duties and Responsibilities

**All Staff**

It is the responsibility of every member of staff working for Northampton Borough Council to report incidents of suspected Fraud & Corruption.

**Investigation Officers**

It is the responsibility of each Investigator to raise and maintain an Investigation file and record all events during the investigation on the FIMS computer system and in accordance with CPIA 1996. At the conclusion of a case the file will either be closed, as there was no criminal case to answer, or passed to the Fraud & Intervention Team Leader for consideration of further action. The file will contain details of the offences, the overpaid amounts and a summary of the actions taken. The investigator will always check the DWP (Department for Work and Pension) and NAFN (National Anti-Fraud Network) database for previous benefit fraud sanctions and convictions before issuing a caution or penalty.

All outcomes will be fully recorded within the FIMS system, and appropriate documents will be passed to the DWP & NAFN for central registration to ensure further attempts to defraud by the same person are considered for prosecution as a first option.

A press release will be prepared and passed to the Press & Publicity section for publication in the local press to maximise the deterrent affect.

**Fraud & Intervention Team Leader**

Responsible for reviewing the cases and applying this policy when completing management checks, and in decision-making processes. They will complete a report that identifies if the sanction is appropriate, why it is considered in the public interest, and any aggravating or mitigating circumstances before presenting a recommendation. Where Prosecution is considered appropriate another senior officer will also review and endorse the recommendation before the case is passed to the appropriate legal section for a final decision.

**Legal Team**

The legal team will review the prosecution case and provide guidance on further action that may be required or evidence that needs to be acquired in order that the case may be correctly presented. The final decision on whether the case should proceed is the responsibility of the legal team.

### 6. Legal Framework

When considering counter fraud activity, Northampton Borough Council must operate under relevant legislation. Listed below are the main Legislative frameworks we work to.

- Social Security Administration Act 1992
- Theft Act 1968.
- Social Security Administration (fraud) Act 1997
- Code for Crown Prosecutors
- Home Office guidance Circular 30-2005
- Human Rights Act 1998
- Crime & Disorder Act 1998
- Data Protection Act 1998
- Criminal Procedures and Investigations Act 1996
- Police & Criminal Evidence Act 1984
- Local Government Act 2000
- Regulation of Investigatory Powers Act 2000
- Fraud Act 2006.

7. References to Corporate Plan/Community Strategy/LAA/LSP/Sub-Policies/Procedures/Related work

Whistleblowing Policy – Held within the employee handbook. Corporate Plan Benefits Business Plan Department for Work and Pensions – Performance Standards Fraud & Intervention Business Plan

8. Consultation/Focus Groups/Consultative Groups/Expert Advice/Legal Advice/Financial Advice-Equality Impact Assessment

This policy has been passed to the following groups for comment. Governance Section. Northamptonshire Local Authority Fraud sections Legal Services

9. Research/Benchmarking/How others deal/have dealt with this issue

This policy has been derived from the previous counter fraud policy and the prosecution policy. References have been taken from publications from Manchester City Council, Bristol City Council, Torridge District Council and Solihull Metropolitan Borough Council.

10. Process Documents

DWP – Fraud Procedures in Investigation – FPI guide (on NAFN website) Intervention Procedures Fraud Admin Procedures Fraud Procedures

11. Training Requirements

The policy will be available to all staff via the Intranet. Housing Benefit & Service Staff will receive a e-mailed copy for reference In addition the document will be stored on the Fraud shared drive for ease of access. 12. Implementation, Monitoring and Review

The Prosecution Policy part of document will need require formal agreement with members before implementation; this is both a requirement for performance standards and an audit recommendation.

The Fraud & Intervention Team Leader will review the policy annually to ensure it remains fit for purpose and will be updated as required.

Significant amendments will be returned to members for agreement.

13. Performance and Risk

This policy impacts NI180 as it effects how we tackle fraud & error encourage customers to report the correct changes on time.

Despite changing national indicators The Fraud & Intervention Team remains an important aspect of benefit administration and local crime reduction. Targets will be set annually to measure performance as a department and individual officers.

This will impact on Northampton residents that use the Housing Benefit service as we will, as appropriate, require individuals to submit data as a review of their circumstances by various methods, including home visits.

The implementation of the policy should not effect to the performance of the fraud team, the purpose of the document is to incorporate recent legislative and operational changes into the policy and to again obtain full Council approval.

14. Appendices inc Work/Implementation Plan

Equalities Impact Assessment – Appendix C Implementation – The policy will be used as a draft document until the document can be present to full council for approval. Appendix A (For Publication)

Prosecution Policy

When alleged frauds are detected, the decision whether to refer matters for prosecution rests with the appropriate Council Officer, who will use the following criteria: -

1. Is there a realistic prospect of a conviction? (The evidential test)
2. Is a prosecution in the public interest?

The Council will only start a prosecution when the case has passed both tests.

In making the decision to prosecute, the following guidance would be used: -

- The amount of money obtained and the duration of the offence.
- The suspect’s physical and mental condition both at the time any offence was committed and at the time prosecution is being considered
- Is the offence serious enough or is there a real possibility it could be repeated
- Voluntary disclosure.
- Co-operation by the suspect
- Any previous incidence of fraud.
- Does the defendant have previous convictions, administration penalties or cautions that are relevant to the present offence
- Whether a conviction is likely to result in a significant sentence.
- Whether there is evidence that the defendant was a ringleader or an organiser of the offence.
- Whether there is evidence of the offence being premeditated.
- Whether the person is in a position of authority or trust.
- Whether there are grounds for believing that the offence is likely to be continued or repeated, for example, by a history of recurring conduct.
- Whether the offence is widespread in the Local Area.
- Whether the Court is likely to impose a very small or nominal penalty.
- Whether the defendant has put right the loss or harm that was caused
  - Defendants must not avoid prosecution simply because they can pay compensation.
- Failure in the investigation, including delay. Deciding on the public interest is not simply a matter of adding up the numbers of factors on each side. The Council must decide how important each factor is in the circumstances of each case and go on to make overall assessments.

Financial Guidelines

Financial guidelines are introduced to show a consistency of approach when applying the prosecution policy and deciding on the appropriate sanction, however, each case is unique and will be considered on its own facts and merits.

Regardless of the amounts involved, Northampton Borough Council will proceed directly to a prosecution where it considers the actions or inactions of the individual(s) warrant disposal through the court system.

Prosecution cases

Prosecution will be proceed for all cases where the total overpayment exceeds £3000 and the criteria above has been appropriately considered.

Formal cautions and administration penalties

The Council may consider offering a Formal Caution or an Administration Penalty depending on the circumstances of an individual case, before this is considered the following circumstances must apply.

- Evidential requirements for prosecution are satisfied, and
- Overpayment is less than £3,000

In order for a case to be considered for a Formal Caution, the customer must admit to the offence during an interview under caution and show some remorse for their actions. Northampton Borough Council will apply Home Office Guidance Circular 30-2005 when administering formal cautions.

As an alternative to a Formal Caution or in cases where the offence has not been admitted and the overpayment is less than £3000 we can consider an Administrative Penalty. In these cases we should be aware of the customers financial position and be mindful that the further penalty can be repaid by the customer or recovered by the council in line with any local anti-poverty strategies and that this will not cause the customer to further offend in order to repay the debt. In these cases we may consider that the case should proceed directly to prosecution.

In addition, any net overpayment of less than £50 is deemed too low to attract an administrative penalty (but not a caution). This does not mean that the debt will not be recovered by other means (deductions from current benefit or by way of Sundry Debt procedures).

In applying these guidelines we must consider the impact on partnership working. We will ensure, when working with other agencies that the policy is not a barrier to presenting the full extent of a fraud before the courts. As a general rule the policy of the prosecuting authority will provide the basis on how to proceed. Appendix B

The process for the first time offenders where the overpayment is under £3000

Is the case **Unsuitable** for Further proceedings?

- Yes → Conclude the investigation using Informal procedures.
- No → Interview Under Caution

Interview Under Caution

Suitable Evidence exists to proceed to Prosecution

- No → Prepare for prosecution
- Yes → Aggravating Factors

Aggravating Factors

Was the offence admitted?

- Yes → Consider a Formal Caution.

- No → Is the customer in a financial position to repay the debt plus a penalty?

- Yes → Consider an Administrative Penalty

- No → Offer Declined

Prepare for prosecution | Directorate | Customer & Service Delivery | Section | Revenues & Benefits | Person Responsible for the assessment | Date of the assessment | |-------------|-----------------------------|---------|---------------------|---------------------------------------|------------------------| | | | Housing Benefit Prosecution Policy | New or Existing | Existing | 10/10/2007 |

**Describe aims/ objectives and purpose of the policy/function to be assessed**

To outline a standard that gives guidance as to the appropriate action to take when considering offences under the Social Security Administration Act 1992.

**Are there any associated objectives associated with this function/policy? If so state**

A published policy that tackles fraud with the benefit system should have a deterrent effect.

**Who is intended to benefit from this function/policy and in what way?**

Northampton Borough Council and its Tax Payers

**Who is responsible for this policy/function?**

Fran Rodgers

**Who implements this policy/function?**

Matthew Steele

**What outcomes are wanted from this function/policy?**

Provide a document that outlines a system of standards that can be approved by elected members of Northampton Borough Council, to improve the anti-fraud message, reduce fraud & error in the system, minimise overpaid benefit and prosecute when these systems fail.

**What factors could contribute to inequality?**

1. Adoption of a blanket policy 2. Communication Barriers (Language & Signing) 3. Cultural Bias 4. Targeting of areas 5. Poor or insufficient communication of benefit regulations

**Are there any concerns that the policy/function could have a negative differential impact on the equality groups? What evidence do you have in each relevant case?**

| Race: Statistical analysis (appendix c) has identified there are no concerns with the impact or targeting of fraud caseload | Disability: Statistical analysis (appendix c) has identified there are no concerns with the impact or targeting of fraud caseload | Gender: Statistical analysis (appendix c) has identified there are no concerns with the impact or targeting of fraud caseload | Sexuality: Statistical analysis (appendix c) has identified there are no concerns with the impact or targeting of fraud caseload | Religion/Belief: Statistical analysis (appendix c) has identified there are no concerns with the impact or targeting of fraud caseload | Age: Statistical analysis (appendix c) has identified there are no concerns with the impact or targeting of fraud caseload | |---------------------------------------------------------------|---------------------------------------------------------------|---------------------------------------------------------------|---------------------------------------------------------------|---------------------------------------------------------------|---------------------------------------------------------------|

**Could the differential impact identified above give cause to a potential for adverse impact in this function/policy?**

No

**Can any adverse impact identified be justified on the grounds of promoting equality of opportunity for one group or any other reason?**

No

**Should this policy/function proceed to a partial impact assessment?**

No

At the present time statistical analysis has identified that the effect of prosecutions does not impact detrimentally on any particular group. I will continue to profile customers to monitor the effect of the new policy.

**Signed (completing officer)**

Matthew Steele

**Signed (Policy officer)**

Matthew Steele

**Date:**

**Comments:**

## Appendix C

### Area: Revenue Services

**Initial Screening**

Is there any evidence or reason to believe that the groups below could be adversely affected?

- Date started: 9/8/2008
- Date completed: 16/8/2008

| Gender | Race | Disability | Age | Religion/belief | Sexual orientation | Date planned | Date completed | |--------|------|------------|-----|-----------------|--------------------|--------------|---------------| | Council Tax Billing | no | no | no | no | None but see recommendation | Not necessary | Not necessary | | Council Tax Recovery | ? | ? | ? | ? | As above | No profile available for section November 2007 | | Benefits (Council Tax and Rent) and Recovery of overpayments | yes | yes | yes | yes | no | As above | November 2007 | | Fraud and Intervention | no | ? | no | no | ? | As above | on evidence available this does not appear necessary but see recommendations | | Non Domestic Rates Billing and Recovery | no | ? | no | no | no | no | Not necessary |

**Partial EIA**

If justified from Initial Screening

**Full EIA**

**Associated policies for this Area**

- Discretionary Housing Payments
- Fraud Policy (still in draft form—will require EIA before adoption)
- Customer Service Strategy
- Corporate Debt Policy (under development—Initial EIA carried out—will require Full EIA)

**Comments/Recommendations**

1. Since advent of civil partnership it has not been possible to update joint liability as this information is not always known. Action needed on future notices
2. No information on some of the strands available on enforcements—To ensure CRM fully implemented data cross match will enable accurate population profiling for all sections

## Fraud/Sanctions

| Benefit Claimant’s Profile April 2007- June 2007 | April 2006 to March 2007 | Northampton Profile July 2005 | |-----------------------------------------------|--------------------------|-------------------------------| | Sample Total = 476 | Sample Total= 65 | (based on Census 2001) 194458 |

### Gender:

| | Male | Female | Not answered | |-------|------|--------|--------------| | Sample Total | 99 | 160 | 217 | | Male of those who disclosed | 38.22% | 61.78% | 49% | | Female of those who disclosed | 38.46% | 61.53% | 51% |

### Age:

| | Under 25 | 25-60 | Over 60 | |-------|----------|-------|---------| | Sample Total | 84 | 260 | 115 | | Under 25 of those who disclosed | 17.64% | 54.62% | 24.26% | | 25-60 of those who disclosed | 0% | 92% | 17% | | Over 60 of those who disclosed | 25% | 7% | 17% |

### Ethnicity (abstract)

| | BME | White British | White other Europe | Not answered | |-------|-----|---------------|--------------------|--------------| | Sample Total | 75 | 211 | 7 | 180 | | BME of those who disclosed | 25.33% | 71.28% | 2.36% | 8.4% | | White British of those who disclosed | 91.6% | 91.6% | 91.6% | 91.6% | | White other Europe of those who disclosed | 2.36% | 2.36% | 2.36% | 2.36% | | Not answered of those who disclosed | 8.4% | 8.4% | 8.4% | 8.4% |

### Sexuality:

| | Heterosexual | Bisexual/Gay/Lesbian | Not answered | |-------|--------------|----------------------|--------------| | Sample Total | 209 | 6 | 261 | | Heterosexual of those who disclosed | 97.20% | 2.79% | 2.79% | | Bisexual/Gay/Lesbian of those who disclosed | 2.79% | 2.79% | 2.79% | | Not answered of those who disclosed | 2.79% | 2.79% | 2.79% |

### Disability:

| | Disabled | Not disabled | |-------|----------|--------------| | Sample Total | 55 | 197 | | Disabled of those who disclosed | 21.82% | 78.17% | | Not disabled of those who disclosed | 7.69% | 4.4% |